APPLE COMPUTER, INC.
\nOPTION CANCELLATION<\/b> AND
\nRESTRICTED STOCK AWARD AGREEMENT<\/b><\/p>\n\n<\/p>\n\n
This\nAgreement is made March 19, 2003 (the \"Effective Date\"), by and between\nApple Computer, Inc. (\"Apple\") and Steven P. Jobs.<\/p>\n\n
In\nconnection with his services as Chief Executive Officer, Mr. Jobs was granted\nan option to purchase 20,000,000 shares of Apple common stock on\nJanuary 20, 2000 and an option to purchase 7,500,000 shares on\nOctober 19, 2001 (collectively, the \"Options\") pursuant to Apple\u0092s 1998\nExecutive Officer Stock Plan (the \"1998 Plan\").<\/p>\n\n
Mr. Jobs and Apple both desire to cancel the Options\nin their entirety and Apple desires to grant Mr. Jobs a restricted stock award\nof 5,000,000 shares of Apple common stock.<\/p>\n\n
Mr. Jobs and Apple agree as follows:<\/p>\n
1. Cancellation\n of Options.<\/u> The Options shall be\n cancelled and disposed of to Apple as of the Effective Date. Following such\n cancellation, Mr. Jobs shall have no rights whatsoever with respect to the\n Options.<\/p>\n
2. Grant\n of Restricted Stock.<\/u> Apple hereby grants\n to Mr. Jobs as of the Effective Date, a restricted stock award of 5,000,000\n shares of Apple common stock (the \"Shares\") pursuant to the terms and\n conditions contained herein and the terms and conditions of the 1998 Plan.<\/b><\/p>\n
3. Vesting of the Shares.<\/u><\/p>\n
(a) Release Date.<\/u> One hundred percent (100%) of the Shares shall be vested on\n March 19, 2006 (the \"Release Date\") provided that Mr. Jobs has remained\n continuously employed by Apple, or any parent or subsidiary of Apple, until such\n date.<\/p>\n
(b) Termination Without Cause Prior to\n Release Date.<\/u> In the event of termination by Apple of Mr.\n Jobs\u0092 employment without \"Cause\" (as defined below) prior to the Release Date,\n the Shares shall be fully vested in Mr. Jobs as of such termination date.<\/p>\n
(c) Termination Due to Death<\/u>. \n In the event of termination of employment due to Mr. Jobs\u0092 death prior\n to the Release Date, that number of Shares deemed to have vested on a pro rata\n daily basis from the Effective Date to the date of death shall be immediately\n vested in Mr. Jobs as of the date of death and shall be released from the\n Reacquisition Right described below. \n The unvested Shares shall remain subject to the Reacquisition Right.<\/p>\n
(d) Resignation for Good Reason Following a\n Change in Control<\/u>. In the event there is a \"Change in Control\"\n \nof Apple (as defined in Section 15(d) of the 1998 Plan) and as a consequence of\n such Change in Control, Mr. Jobs resigns for \"Good Reason\" (as defined below),\n the following acceleration provisions shall apply:(i) If such Change of Control and subsequent\n resignation for Good Reason occurs during the first eighteen (18) months\n following the Effective Date, then 50% of the Shares shall be immediately\n vested in Mr. Jobs and shall be released from the Reacquisition Right.(ii) If\n such Change of Control and\n subsequent resignation for Good Reason occurs more than eighteen (18) months\n after the Effective Date, then 100% of the Shares shall be immediately vested\nin Mr. Jobs and shall be released from the Reacquisition Right.<\/p>\n
(e) Termination for Other Reasons<\/u>. \n In the event that Mr. Jobs\u0092 employment with Apple, or any parent or\n subsidiary of Apple, terminates prior to the Release Date for any reason other\n than those specified in Sections (b), (c) and (d) above, including termination\n voluntarily by Mr. Jobs or by Apple for Cause, Apple shall, upon the date of\n such termination, have an irrevocable, exclusive option (the \"Reacquisition\n Right\") to reacquire the Shares at no cost to the Apple.<\/p>\n
(f) Exercise\n of Reacquisition Right<\/u>. The\n Reacquisition Right shall be exercised by Apple by delivering written notice to\n Mr. Jobs or to Mr. Jobs\u0092 executor within ninety (90) days following the date of\n termination. Upon delivery of such\n notice, Apple shall become the legal and beneficial owner of the Shares being\n reacquired and all rights and interests therein, and Apple shall have the right\n to retain and transfer to its own name the Shares being reacquired.<\/p>\n
(g) Termination\nof Reacquisition Right<\/u>. If the\nCompany does not elect to exercise the Reacquisition Right conferred above by\ngiving the requisite notice within ninety (90) days following the termination\nof Mr. Jobs\u0092 employment by Apple, or any parent or subsidiary of Apple, the\nReacquisition Right shall terminate and the Shares shall be fully vested in Mr.\nJobs. The Shares released from the Reacquisition Right shall be delivered to\nMr. Jobs at his request.<\/p>\n\n\n\n
(h) Certain\nDefinitions.<\/u><\/p>\n\n\n\n
(i) \"Cause\"<\/u> For purposes of this Section 3, \"Cause\"\n\nshall mean: <\/p>\n
(i) a willful act of\n embezzlement, fraud or dishonesty by Mr. Jobs which is materially injurious to\n Apple; (ii) Mr. Jobs\u0092 continued violation of his obligation to perform the\n duties and responsibilities normally required of a chief executive officer\n which are willful or grossly negligent, after Mr. Jobs has been given written\n notice from the Apple Board of Directors describing his violations and has\n failed to cure or commence to cure such violations within thirty (30) days; or\n (iii) Mr. Jobs\u0092 conviction of, or plea of nolo contendere to, a felony which\n the Board of <\/p>\n
<\/p>\n\n
2<\/p>\n\n\n
Directors reasonably\nbelieves has had or will have a material detrimental effect on Apple\u0092s\nreputation or business.<\/p>\n\n\n\n
(ii) \"Good\nReason.\" For purposes of this Section 3, \"Good Reason\" shall mean a resignation\nby Mr. Jobs of his employment with Apple, or any parent or subsidiary of Apple,\nas a result of any of the following:<\/p>\n\n\n\n(a) A\nmeaningful and detrimental alteration of his position, his title, or the nature\nor status of his responsibilities (including his reporting responsibilities)\nfrom those in effect immediately prior to the Change in Control. For purposes of this clause (a), a\nmeaningful and detrimental alteration shall exist if, on or after the Change in\nControl, Mr. Jobs does not hold the position of Chief Executive Officer of the\nCompany (or the surviving entity resulting from a merger or consolidation of\nthe Company with another entity (the \"Surviving Entity\") or if there is any\nadverse change on or after the Change in Control in his title, position or\nreporting responsibilities;
(b) A\nreduction by Apple in Mr. Jobs\u0092 annual base salary as in effect immediately\nprior to the Change in Control or as the same may be increased from time to\ntime thereafter;<\/p>\n\n\n\n
(c) The\n relocation of the Apple office where Mr. Jobs is employed as of the Change in\n Control to a location which is more than seventy-five (75) miles away from such\n office, or a requirement that Mr. Jobs be based more than seventy-five (75)\n miles away from his Apple office as of the Change in Control.<\/p>\n
4. Restriction\n on Transfer<\/u>. Mr. Jobs shall not\n sell, transfer, pledge, hypothecate or otherwise dispose of any Shares prior to\n the Release Date or any earlier lapse or termination of the Reacquisition\n Right.<\/p>\n
5. Escrow\nof Shares<\/u>. Until the Release Date,\nthe Shares will be held in book name by Apple\u0092s transfer agent. Subject to the\nterms hereof, Mr. Jobs shall have all rights of a shareholder with respect to\nsuch Shares while they are held in escrow, including without limitation, the\nright to vote the Shares and receive any cash dividends declared thereon. If, from time to time during the term of the\nReacquisition Right, there is (i) any stock dividend, stock split or other\nchange in the Shares, or (ii) any merger or sale of all or substantially all of\nthe assets or other acquisition of Apple, any and all new, substituted or\nadditional securities to which Mr. Jobs is entitled by reason of his ownership\nof the Shares shall be held on his behalf by the Apple\u0092s transfer agent and\nincluded thereafter as \"Shares\" for purposes of this Agreement and the\nReacquisition Right.<\/p>\n\n
<\/p>\n\n
3<\/p>\n\n\n
6. Tax\nConsequences.<\/u> Mr. Jobs understands\nthat he (and not Apple) shall be responsible for his own tax liability that may\narise as a result of the transactions contemplated by this Agreement. Mr. Jobs understands that Section 83 of the\nInternal Revenue Code of 1986, as amended (the \"Code\") taxes as ordinary income\nthe difference between the amount paid for the Shares and the fair market value\nof the Shares as of the date any restrictions on the Shares lapse. In this context, \"restriction\" includes the\nright of Apple to reacquire the Shares pursuant to its Reacquisition Right. Mr. Jobs understands that he may elect to be\ntaxed at the time the Shares are granted rather than when the Reacquisition\nRight lapses by filing an election under Section 83(b) of the Code with the\nI.R.S. within 30 days from the date of grant.<\/p>\n\n\n\n
7. General\nProvisions.<\/u><\/p>\n\n\n\n
(a) This\nAgreement and the 1998 Plan represent the entire agreement and understanding\nbetween the parties as to the subject matter hereof and supersede all prior or\ncontemporaneous agreements, whether written or oral.<\/p>\n\n\n\n
(b) This\nAgreement shall be governed by the laws of the State of California without\nreference to its conflicts of law principles.<\/p>\n\n\n\n
(c) No\nwaiver, alteration or modification of any of the provisions of this Agreement\nshall be binding, unless in writing and signed by duly authorized\nrepresentatives of the parties hereto. This Agreement shall be binding on, and\nshall inure to the benefit of, the parties and their respective successors and\nassigns.<\/p>\n\n\n\n
(d) This\nAgreement may be executed in two or more counterparts, each of which shall be\ndeemed an original and all of which together shall constitute one instrument.<\/p>\n\n\n\n
IN WITNESS\nWHEREOF, the parties have duly executed this Agreement effective as of the date\nset forth above.<\/p>\n\n\n\n<\/pre>\n
| \n APPLE COMPUTER, INC.<\/p>\n<\/td>\n | \n<\/td>\n<\/tr>\n | ||
| \n<\/td>\n | \n<\/td>\n<\/tr>\n | ||
| \n By:<\/p>\n<\/td>\n | \n \/s\/ Nancy R. Heinen<\/p>\n<\/td>\n | \n<\/td>\n | \n \/s\/ Steve Jobs<\/p>\n<\/td>\n<\/tr>\n |
| \n<\/td>\n | \n<\/td>\n<\/tr>\n | ||
| \n Its: Senior Vice President<\/p>\n<\/td>\n | \n Steven P. Jobs<\/p>\n<\/td>\n<\/tr>\n | ||
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